Correlation Between Coeur Mining and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Coeur Mining and Newmont Goldcorp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Coeur Mining and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur Mining and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Coeur Mining and Newmont Goldcorp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Coeur Mining with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and Newmont Goldcorp.
Diversification Opportunities for Coeur Mining and Newmont Goldcorp
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Coeur and Newmont is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp and Coeur Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Coeur Mining are associated (or correlated) with Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Coeur Mining i.e., Coeur Mining and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Coeur Mining and Newmont Goldcorp
Considering the 90-day investment horizon Coeur Mining is expected to generate 1.88 times more return on investment than Newmont Goldcorp. However, Coeur Mining is 1.88 times more volatile than Newmont Goldcorp Corp. It trades about -0.01 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.29 per unit of risk. If you would invest 674.00 in Coeur Mining on August 27, 2024 and sell it today you would lose (17.00) from holding Coeur Mining or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coeur Mining vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Coeur Mining |
| Newmont Goldcorp Corp |
Coeur Mining and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coeur Mining and Newmont Goldcorp
The main advantage of trading using opposite Coeur Mining and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining position performs unexpectedly, Newmont Goldcorp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Newmont Goldcorp will offset losses from the drop in Newmont Goldcorp's long position.The idea behind Coeur Mining and Newmont Goldcorp Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Agnico Eagle Mines | Newmont Goldcorp vs. Kinross Gold | Newmont Goldcorp vs. Wheaton Precious Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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